(RBI) agreed to provide additional IRs toNepal

Kathmandu, March 31 – The Reserve Bank of India (RBI) has agreed to provide additional IRs 1billion to Nepal for 2013.

Until now, the Indian central bank had been making available IRs 4 billion per year. For this fiscal year, the RBI has already made available IRs 3 billion. The Nepal Rastra Bank (NRB) has been demanding that the RBI make available IRs 6 billion per year, a senior NRB official said.

Besides RBI, other major sources of IC notes for Nepal are Nepali migrant workers and Indian tourists, among others.

The domestic market is facing an acute shortage IC notes due to factors such as rising trade deficit with India and informal cross-border trade.

Increased cross-border smuggling, capital flight under various modes, including payment for insurance schemes, and increased demand for IC for travel, medical treatment and pilgrimage, have resulted in IC crunch in the domestic market.